The Ethics of Oil Drilling: BP and the Fraternity of Crude

Posted On: Thursday, June 17, 2010

Update June 18, 2010: BP CEO Tony Hayward has been replaced by Robert Dudley, a BP managing director, in day-to-day involvement of the Gulf.  In testimony yesterday before a House Energy and Commerce subcommittee, Hayward expressed contrition and said the Gulf oil disaster “never should have happened.” However, he made clear he hadn’t been involved in decision making on well design or engineering. Congressmen were critical of his evasive answers, some called stonewalling, and BP’s complacency about the potential danger of the well. The question is, will Dudley make a difference?

“What have you done to establish credibility?” asked Rep. Anthony Weiner (D-NY) of Lamar McKay, BP America’s president and chairman. “I don’t understand on any level why BP should be in control of anything anymore.” Rep. Weiner was grilling McKay at a U.S. House Energy and Commerce Subcommittee June 15, 2010 on the Gulf of Mexico Oil Spill and Drilling Safety.

“The one thing we know from this hearing with metaphysical certitude,” the congressman continued, “is that BP created this problem through their own negligence, through their own cost-cutting, through their own corner-cutting.”

While his remarks were directed at BP, also at the witness table answering questions about the standards and procedures followed in oil drilling disaster planning were Rex Tillerson, chairman and CEO ExxonMobil; John Watson, chairman and CEO Chevron; James Mulva, chairman and CEO ConocoPhillips, and Marvin Odum, president Shell Oil.

Although the other executives went to considerable lengths to distance themselves from how BP has handled the Gulf disaster, apparently wanting to create the impression their company’s procedures would have created a better outcome, subcommittee chair Rep. Edward Markey (D-MA) wasn’t buying it. Rep. Markey said their Gulf disaster recovery plans were essentially identical, inadequate, and out of date. He cited BP’s 2009 response planwhich listed a wildlife expert who had died in 2005, and put walruses, sea otters, sea lions, and seals in the Gulf of Mexico when actually they are found no where near there. Not great confidence builders.

Oil companies’ protestations about their careful disaster recover plans are disingenuous at the very least, when you consider that more oil has been spilled by these same and other oil companies in the Niger delta every year than has been spilled so far in the Gulf of Mexico. This hasn’t gotten on the radar the way the Gulf spill has, but it is no less real, frightening, or less a testimony to the abuse of power oil companies flex unchecked globally.

Back to the hearing on the Gulf, McKay, 18 months into his chairman and president role, maintained an emotionless, detached, demeanor responding to hostile grilling, sticking to his talking points. He reminded me of an emperor being told he was wearing no clothes and refusing to look down and confirm that he was in fact naked. Not a pretty sight.

BP’s failure to be able to curtail the damage and stop what is now estimated to be 60,000 barrels of oilgushing into the Gulf a day, the equivalent of an Exxon Valdez slick every four days, has been a stunning admission that the U.S. has essentially entrusted the environment to companies who have demonstrated absolutely no ability to safeguard that trust. It is an appalling wake-up call. In the exposure of who is naked, the U.S. government has shown up without clothes as well.

The problem is so complex: It isn’t just about oil executives trying to duck responsibility for not having the level of risk management and disaster recovery expertise required. The problem isn’t even just the all-too-familiar style of less-admired CEOs who cut corners in the lust for the biggest possible profits. And tragically, it isn’t just about how this spill’s calamity has killed people, fish, wildlife, jobs, industries, and the environment in the Gulf region.

It isn’t even the astonishingly revealing statement on June 16, 2010 of BP Chairman Carl-Henric Svanberg who said: “I hear comments sometimes that large oil companies are greedy companies or don’t care, but that is not the case with BP. We care about the small people.”In the face of negative public reaction, he later apologized saying he spoke “clumsily.”

Ultimately, it is only by seeing people and the environment as “little” that any of this makes any perverse sense. If people and the world’s environment were players, the intentions of these companies would have to be different. But as long as it is about crude and not about the rest of the world, how this tragedy happened seems more explainable.

What is evident from the BP catastrophe and from the horrific tales in the Niger delta is that we, the world, have ceded power to the oil companies to destroy our world, and the question is, how can we ever put the genie back in the bottle?

Gael O’Brien is a catalyst for leaders leading with purpose and impact. She is an executive coach with a corporate and public affairs background. Gael is President of Strategic Opportunities Group.

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